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New Accounting Pronouncements | 12 Months Ended
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Dec. 31, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
New Accounting Pronouncements | New Accounting Pronouncements The following is a summary of new accounting pronouncements that apply or may apply to our business. ASC Topic 606 In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard on revenue recognition (“ASC 606”) that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASC 606 contains a five-step approach that entities will apply to determine the measurement of revenue and timing of when it is recognized, including (i) identifying the contract(s) with a customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to separate performance obligations, and (v) recognizing revenue when (or as) each performance obligation is satisfied. ASC 606 also requires a number of quantitative and qualitative disclosures intended to enable users of the financial statements to understand the nature, amount, timing, and uncertainty of revenue, and the related cash flows. Effective January 1, 2018, we adopted ASC 606 using the modified retrospective transition approach for all contracts not completed as of the date of adoption. The modified retrospective transition approach recognizes any changes as of the beginning of the year of initial application (i.e., as of January 1, 2018) through retained earnings, with no restatement of comparative periods. The only significant change in revenue recognition as a result of the adoption of ASC 606 relates to our power transformer business. Under ASC 606, revenues for our power transformer business are being recognized over time, while under previous revenue recognition guidance (ASC 605), revenues for power transformers were recognized at a point in time. See Note 5 for further discussion of our revenue recognition principles under, and the post-adoption impact of, ASC 606. Summarized below is the impact of the initial application of ASC 606 on our consolidated balance sheet:
| December 31, 2017 |  | Impact of Adoption of ASC 606 |  | January 1, 2018
Assets |  |  |  |  |
Accounts receivable, net | $ | 267.5 |  |  | $ | (36.0 | ) |  | $ | 231.5 |
Inventories, net | 143.0 |  |  | (40.2 | ) |  | 102.8 |
Contract assets | — |  |  | 70.7 |  |  | 70.7 |
Other current assets | 97.7 |  |  | (3.6 | ) |  | 94.1 |
Deferred income taxes | 50.9 |  |  | (0.9 | ) |  | 50.0 |
Liabilities |  |  |  |  |
Contract liabilities | — |  |  | 86.9 |  |  | 86.9 |
Accrued expenses | 292.6 |  |  | (99.0 | ) |  | 193.6 |
Other long-term liabilities | 885.8 |  |  | (1.6 | ) |  | 884.2 |
Equity |  |  |  |  |
Accumulated other comprehensive income | 250.1 |  |  | (0.3 | ) |  | 249.8 |
Retained deficit | $ | (742.3 | ) |  | $ | 4.0 |  |  | $ | (738.3 | )
In January 2016, the FASB issued an amendment to guidance that (i) requires equity securities (excluding equity method investments) to be measured at fair value, with changes in fair value recognized in net earnings, and (ii) enhances the disclosure associated with these instruments. The amendment allows equity securities that do not have readily determinable fair values to be measured at fair value, either upon the occurrence of an observable price change or identification of an impairment. We adopted this amendment in 2018, with the impact limited to an adjustment to the carrying value of an equity security that we had been accounting for based on its historical cost. In connection with our adoption, we adjusted the carrying value of this equity security to its estimated fair value, which resulted in a reduction, net of tax, of our retained deficit of $12.0. See Note 16 for additional details. In February 2016, the FASB issued an amendment to existing guidance that requires lessees to recognize assets and liabilities for the rights and obligations created by leases with terms that exceed twelve months. In addition, this amendment requires new qualitative and quantitative disclosures about leasing arrangements. This standard is effective for annual reporting periods beginning on or after December 15, 2018 for public business entities, and interim periods within those annual reporting periods. Early adoption is permitted, and we plan to adopt the standard as of January 1, 2019 on a modified retrospective basis. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to not reassess the lease classification for any expired or existing leases. We have yet to finalize our analysis of the initial impact of the new standard on our consolidated financial statements, but currently estimate that the adoption will result in the recognition of additional lease assets and lease liabilities not exceeding $35.0. We do not believe the adoption will have a material impact on our future results of operations. The standard will have no impact on our debt-covenant compliance under our current agreements. Refer to Note 14 for additional information regarding future minimum lease payments. In August 2016, the FASB issued an amendment to existing guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. This amendment provides clarification on eight specific cash flow presentation issues. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and is to be applied retrospectively. We adopted this guidance during the first quarter of 2018. In connection with the adoption, we reclassified net proceeds related to company-owned life insurance policies of $0.7 and $7.7 from operating activities to investing activities within the consolidated statements of cash flows for the years ended December 31, 2017 and 2016, respectively. In October 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-16, which removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The requirements of ASU 2016-16 are to be applied on a modified retrospective basis, which entails recognizing the initial effect of adoption in retained earnings. We adopted ASU 2016-16 as of January 1, 2018, which resulted in an increase of our retained deficit of $0.2. In January 2017, the FASB issued an amendment to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires that an entity recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This amendment is effective for annual reporting periods beginning after December 31, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests. In March 2017, the FASB issued an amendment to revise the presentation of net periodic pension and postretirement benefit cost. The amendment requires the service cost component to be presented separately from the other components of net periodic pension and postretirement benefit cost. Service cost is required to be presented with other employee compensation costs within operating income. The other components of net periodic pension and postretirement benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost/credits, and gains or losses, are required to be separately presented outside of operating income. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with the financial statement presentation requirements of the amendment applied retrospectively. We adopted this guidance during the first quarter of 2018. In connection with the adoption, we reclassified $5.1 and $15.0 of net periodic pension and postretirement benefit expense from “Selling, general and administrative” to “Other expense, net” within the accompanying consolidated statements of operations for the years ended December 31, 2017 and 2016, respectively. See Note 10 for details of our pension and postretirement expense. In August 2017, the FASB issued significant amendments to hedge accounting. The new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The amendments can be adopted immediately in any interim or annual period (including the current period). We will adopt this guidance on January 1, 2019, with such adoption not expected to have a material impact to our consolidated financial statements. In February 2018, the FASB amended its guidance for reporting comprehensive income to reflect the potential impacts of the reduction in the corporate tax rate resulting from the Act. The amendment gives the option of reclassifying the stranded tax effects within AOCI to retained earnings during the fiscal year or quarter in which the effect of the lower tax rate is recorded. The amendment is effective for years beginning after December 15, 2018, with early adoption permitted. We adopted this guidance as of January 1, 2018, which resulted in an increase of our retained deficit of $4.8.

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- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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